By on November 16, 2009

saab_retro_photo

Saab has not had an easy path to salvation. The Koenigsegg Group has had to provide finances, agree to a price and conditions with GM, get loan from European Investment Bank (EIB),and  coax the Swedish Government into guaranteeing loans. Now there’s one more hurdle left, and it’s the same challenge that scuppered the Opel to Magna deal: The EU.
Reports of recent weeks in the Scandinavian media have told us that the EU is thinking the Saab deal over. And when mighty EU thinks, things take time… So, what are they thinking about? They have to decide whether Swedish Govt’s guarantees to SAAB’s loan in the European Investment Bank should be considered subsidies or not. EU countries are not allowed to subsidize unprofitable companies – and the EU has some questions on SAAB’s and Koenigsegg Groups financial plan, and Saab’s results prior to the reconstruction. So the whole thing might stretch into next year until – or if at all – the deal is closed. Incidentally, questions about the anti-competitive nature of the German government’s support of the Opel to Magna deal killed that sale already. But does GM want Saab back as badly?

Now, this wasn’t really unexpected (except perhaps for Christian von Koenigsegg, who wanted the deal finished in time to present it at the IAA in Frankfurt in September) because it’s part of the process of doing business in Europe. But Saab is being squeezed from other sides too. Swedish Radio is reporting today that Saab has to return 11 million Euros to the Government, money that guaranteed salaries for the employees at Saab in connection with Saab’s restructuring application in February. And at the same time, a spokesman from GM, in connection with their letter to the US Saab-dealers last week makes it clear that if the Koenigsegg-Saab deal goes wrong (as Opel has) Saab is history, gone, dead (as in Pontiac, Saturn or Oldsmobile dead).

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8 Comments on “Saab Deal Going The Way Of Opel?...”


  • avatar
    Lokkii

    I can testify with some authority that SAABs have never made sense as my father bought his first SAAB in 1959 and we drove them exclusively until about 1980. 

    There was never more than a small market for their cars -  the early ones were for people who needed a great snow car but didn’t care about horsepower or practicality.
    It’s certainly true that the cars were designed by aircraft engineers, but people usually neglect to mention that these engineers were desperate, out-of- work aircraft engineers.

    When SAAB recognized that this niche was tiny, they tried to shift to become a more expensive and sporty alternative to Volvo.  They had some success with this plan – largely because of the cult status their convertibles acheived from people who needed a great snow convertible but didn’t care about reliability or practicality.  These cars were designed by the sons of the out-of-work aircraft engineers who had by this time gones to college and studied – marketing. They were particularly popular in California where a convertible with great snow capability is a necessity.

    SAAB’s current plan of being the Buick of Subaru’s limits them to a tiny niche within a small niche.   These cars are designed by Accountants who know that the price of badges, fancy alloy wheels, and metallic paint  isn’t all that bad compared to actually designing a car.  (See the Trollblazer, the SAAB Suv based on the Trailblazer.)

    So, the bottom line:  There’s never been a market for SAAB, but that hasn’t stopped them in 60 years, so why would they go out of business now?

    Koenigsegg’s plan to make SAAB the Lamborghini of snow-capable convertibles makes no less sense than any of their previous interations – I wish I had a clever phrase to sum up Koenigsegg’s marketing plan, but I can’t think of a way to say the opposite of “Sell em cheap but make it up on the volume”.

    The only question is whether GM will keep making SAABaru’s or will try to steal Koenigsegg’s brilliant scheme to make a small fortune.

    • 0 avatar
      black turbo

      Lokki,
      You seem very critical of Saab, but I understand that there are several reasons why. I will agree that Saab has lost their way as a brand since coming under GM ownership. I’ve owned several Saabs, and my least favorite is my 9-3 that was designed under GM. It is an exercise in platform sharing, and can be described as mediocre at best. However, it is still a rock solid reliable automobile, and a lot more enjoyable than many of the Japanese or domestic appliances.
      The older Saabs I’ve had/have are even more reliable and more enjoyable.
      I will agree with you that there is no market for Saab as they are right now, however, I believe that there once was a market for the well engineered and reliable cars that Saabs once were. If Koenigsegg can manage to return them to that, people will be willing to pay the price premium that the quality will command.

  • avatar
    Daanii2

    “it’s the same challenge that scuppered the Opel to Magna deal: The EU.”

    Not in my opinion. The GM board scuppered the Opel to Magna deal. I don’t think the EU had much to do with it. They did force delays, but that’s normal in these deals. With a willing seller, the deal still would have been done.

  • avatar
    spartie

    this is a lesson to Koeningsegg and Magna, striking a deal with GM is like a striking a deal on the schoolyard. You need a ‘no takebacks’ clause.

  • avatar
    micvog

    Of all the brands disappearing from the marketplace, SAAB is the first one I will miss.  I had two SAABs and, apart from some annoying electrical gremlin that would cause the trunk to open while on driving down the highway, my 2004 Saab 9-3SS is one of my favorite former vehicles.

  • avatar
    superbadd75

    In general, Saab has strayed from their customer base, and they don’t quite meet the expectations of the customers to which they aspire. They have always been a very small volume niche brand, serving a segment that could easily be served by a non-niche car company. Subaru fills a lot of the void left by the old Saab, and the Eurolux marques like BMW, Audi, and maybe even VW to a degree can fill the remaining gaps for those looking for luxury. I can’t see anybody making a good business case for Saab in today’s auto market, and any company that invests in them at this point is insane. It’s a lost cause, IMO. I like what Saab once was, but those days are long gone. Time to remove the life support and let the patient die.

  • avatar
    lawstud

    ” spokesman from GM, in connection with their letter to the US Saab-dealers last week makes it clear that if the Koenigsegg-Saab deal goes wrong (as Opel has) Saab is history, gone, dead (as in Pontiac, Saturn or Oldsmobile dead).”
    Better to kill it outright and keep the engineers around for the dual clutch gearbox they were working on for the next corvette (C7) rather than create a company that competes with them and uses their engineering prowess.

  • avatar
    lawstud

    FYI the pictures of the Saab 9-5  show an awesome looking Saab. What remains to be seen is whether it has the works to be successful.


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